As Spotify passes the mark of 50 million registered users, the fallout from a perfectly swift storm continues, with Founder Daniel Ek responding to Taylor Swift’s (pictured) decision to pull her entire catalogue from the service.
Ek’s response, which can be read in full here states: “Taylor Swift is absolutely right: music is art, art has real value, and artists deserve to be paid for it. We started Spotify because we love music and piracy was killing it”.
Ek continued, revealing that the service had paid out $2bn to artists since its inception: “That’s two billion dollars’ worth of listening that would have happened with zero or little compensation to artists and songwriters through piracy or practically equivalent services if there was no Spotify – we’re working day and night to recover money for artists and the music business that piracy was stealing away”.
However, Ek also added that Spotify pays 70% of its income to rights holders and stated: “If that money is not flowing to the creative community in a timely and transparent way, that’s a big problem”, shifting the focus to how transparent labels and rights holders are with their artists regarding streaming royalties.
One of the key reasons Swift’s team are thought to have pulled the catalogue is its refusal to ‘window’, allowing artists to place their music exclusively on the platform’s premium tier initially for a limited time. Swift clearly isn’t opposed to streaming per se as her music can be found on numerous paid for streaming subscription services- though the plot thickens slightly with rumblings that Swift has signed a Google only deal timed with the launch of YouTube’s new streaming service. This was certainly the view of Billy Bragg, who this week chipped into the debate and accused Swift of “selling her soul to Google” and staging a corporate power play against Spotify.
This followed an open exchange through the media between Ek and Swift’s Manager Scott Borchetta. Ek argued that Swift was set to earn $6m in royalties from the service and Borchetta countered that Spotify had paid a mere $500,000 for Swift’s domestic streams last year. Spotify replied stating it had paid Swift $2 million in global streaming royalties over the last 12 months. Of course, it turned out that both were correct in a classic media move of comparing apples to oranges. It was a page turner whilst it lasted.
Of course, Spotify’s argument is that the free tier is the gateway drug to continuing to pay for music, with 80% of premium users initially coming via that route.
As Music Week points out, 12.5 million of Spotify’s 50 million users are premium accounts, meaning that the service is rapidly growing, adding 10m registered users and 2.5m paying subscribers in the last six months.
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